California’s Proposition 19, known ever so formally as the Regulate, Control and Tax Cannabis Act of 2010 is being championed by a lot of people because it would have massive tax benefits. And it will–just not the ones you expect.

The biggest tax benefit of Proposition 19 would be the cut in law enforcement, not the revenue from those who like to pass to the left. In fact, that revenue is projected to be pretty small, since it’s all sales tax based. Even at a higher “sin tax” rate, it’s only projected to bring in $500 million annually. Nothing to sneeze at for a state as in debt as California, but nothing that will save them either.

Californians pay the highest sales tax in the nation. Their top-bracket earners have the second-highest income tax rate in the country. The middle class to upper class — those making $48,000 to $1 million — are right up there among the most highly taxed, too. California’s gas tax, at 35.3 cents per gallon, is third-highest in the nation. Corporations face the highest tax rates in the West.

California is famous for having high taxes, but they’re still a subject of perennial debate. Outside of California, the facts are pretty stark: state residents take home less of their paychecks than almost anyone else, and more gets taken out of the after-tax money they spend. Add that to the generally high cost… Read more…

But California isn’t the only one with bills to pay. What about people who were counting on a tax refund? There’s a big difference between $100 in hand and a $100 check that’s not in the mail now and won’t be for some time.

What’s odd is that usually, we have a simple way of dealing with this problem: California has made plenty of promises to pay billions of dollars in the future to fund spending it wants now — those promises are bonds. That’s simpler than just… Read more…